Indian Prime Minister Narendra Modi's alliance raced to a majority in early vote counting trends in the general election on Tuesday, but the numbers were well short of the landslide predicted in exit polls, TV channels showed.

The early see-saw trends spooked markets with stocks falling steeply and the rupee also fell sharply against the dollar and benchmark bond yields were up.

The markets had soared on Monday after exit polls on June 1 projected Modi and his Hindu nationalist Bharatiya Janata Party (BJP) would register a big victory, with its National Democratic Alliance (NDA) seen getting a two-thirds majority and more.

TV channels showed the NDA was ahead in nearly 300 of the 543 elective seats in parliament, where 272 is a simple majority, in early counting at 2pm Hong Kong time. The opposition INDIA alliance led by Rahul Gandhi's centrist Congress party was leading in over 220 seats, higher than expected.

TV channels showed BJP accounted for nearly 250 of the seats in which the NDA was leading, short of a majority on its own, compared to the 303 it won in 2019.

A third Modi term with a slim majority for BJP – or having to depend on NDA allies for a majority – could introduce some uncertainty into governance as Modi has ruled with an authoritative hold over the government in the last decade.

However, politicians and analysts said it was too early to get a firm idea of the voting trends since a majority of ballots were yet to be counted.

"It's a fair assessment to say 400 at the moment certainly looks distant," BJP spokesperson Nalin Kohli told the India Today TV channel, referring to some projections that gave 400 seats to the NDA.

"But we need to wait...to have a final picture of the seats because the exit polls speak of a massive sweep, [and] the counting trends currently don't seem to match that," he said.

"The BJP-NDA will form the government, that trend is very clear from the start," he added. (Reuters)